Steps in Strategic Human Resource Management - Essay Example

? Strategic Human Resource Management Contents Contents 2 0 The Seven-Step Model for Implementing HR Scorecard 3 2.0 Balance Scorecard 6 3.0 HR Scorecard for Google Company 7 3.1 Step 3- Creating Strategy Map 7 Source: Author’s Creation 10 3.2 Step 6- Strategic HR measurement system 10 3.3 Step- 7- Implementing the Strategy 11 References 14 1.0 The Seven-Step Model for Implementing HR Scorecard There are seven steps associated with implementation of HR Scorecard in the organization. Seven steps can be illustrated in the following manner. Clearly Defined Business Strategy Top management of the company needs to communicate business objective throughout the organization in a clearly defined manner helping individual employees to understand the objective precisely. Building Business Case for HR as a Strategic Asset Human resource professionals need to build strong case studies supporting the business objective communicated by the management to employees. The HR department can use previous research works, academic resource, survey reports and industry data in order to support order to build business case. Strategy Map Creation Performance measurement action needs to be integrated by HR department in order to trigger value creation process. The company needs to create graphical representation of performance drivers while mapping the value chain process. HR Deliverable within Strategy Map HR managers need to depict performance drivers and HR enablers separately in order to increase potentiality of strategic map. HR deliverables must support firm level performance drivers of strategy map. Aligning HR Architecture with HR deliverables HR managers need to architect existing HR system (work organization, competencies) in accordance with HR deliverables (low turnover) to increase strategic value of the map. Aligning existing HR system with organization’s macro level strategy plays cordial role in this step (Becker, Ulrich and Huselid, 2001, p.p 36-47). Strategic Measurement System In this stage HR managers develop measurement tool for HR deliverables to fulfil business objective of the organization. Measurement Detailed process flow for executing and monitoring is drawn in this step. HR managers focus on implementation strategy of the HR Scorecard in context to objective of the organization. The seven step model can be defined in the following manner. (Source: Becker, Ulrich and Huselid, 2001, p.p 36-47) 2.0 Balance Scorecard Some of the major performance measurement tools that are being used in current business scenario include Balanced Scorecard, Economic Value Added (EVA), Activity Based Costing and Management, Performance Prism and Quality Management. However among the aforementioned tools, importance and usage of balanced scorecard will be principally highlighted through the entire report. While the saying ‘balanced scorecard was coined in the early 1990s’, the origin of this approach however is believed to be deep, and also embrace radical work of General Electric (GE) during the early 1950s. The work was basically based on reporting of performance measurement. Apart from this French process engineers have also contributed immensely towards the development of performance management tools. There work was during the early 20th century. In this context the engineers literally developed a “dashboard” in order to monitor performance levels in a simplified and efficient way. Despite of its early conception, it was originally developed at Harvard business school by Dr. David Norton and Dr. Robert Kaplan in the year 1992 (Eckerson, 2010, P. 11). During the initial phases after the development of balanced scorecard, it was merely used as the performance measurement tool or a performance measurement agenda. Nevertheless slowly with the passage of time balanced scorecard has been able to gain much more importance in the professional field. A number of companies incorporated balanced scorecard into their system of operation in order to facilitate effective and well-organized performance measurement system. Nowadays balanced scorecard is considered as a valuable strategic planning tool. It helps an organization to transform its strategic plan from an unreceptive document to a ‘mandatory task’ on a regular basis. A balanced scorecard not only offers a framework for performance measurement but enables planners to discover what must be accomplished and measured also. Furthermore it also helps the executives to actually execute the proposed strategies (Kaplan, and Norton, 1996, pp. 7-30). 3.0 HR Scorecard for Google Company 3.1 Step 3- Creating Strategy Map The study will try to create identify value chain process for the company. Value chain for Google diverges from tradition model proposed by Michael Porter due to absence of production phase. Primary activity depends on gathering web users to use the search engine while second step involves attracting users to strategically placed web advertising created by their advertising partners. Attracted customers might purchase advertised product and this situation fulfils sales objectives of the company. The company also uses secondary support like technology and human resource management in order to guide clients to specific sites by using right keywords. For example, during 2012 London Olympic the company used state of art technology to design the site in a creative manner in order to attract sports lovers. Google’s primary activity is dependent on secondary supports like technology, human resource management and infrastructure (Basu, 2004, P. 287). The company always hires competent candidates having passion to do things creatively and hence the company gives utmost importance on human resource management. The company creates value by providing wide range of relevant search results to clients within shortest time frame. Business objective of the company is to provide search result in most relevant manner (for this reason their home page do not allow more than twenty eight words in order to avoid search result cluttering) with minimum advertisement interruption. The company needs to focus on following perspectives to create strategic map. Strategic goal of the company is to retain and expand user base and providing most relevant search result in the shortest time frame. To ensure fulfillment of the above mentioned objective the organization needs to encourage research & development to create better website and encourage systems engineers to design the search result in creative manner. Negative performance drivers like role ambiguity, lack of motivation, poor work culture can be classified as strategic hindrance for HR scorecard implementation. The company needs to eradicate negative performance driver to create sustainable HR scorecard. HR departments of the company need to focus on work dynamics among employees and take corrective measure where the dynamics is lacking (de motivation among employees, poor group dynamics and employees showing no interest to do the work creatively). After assessing the value chain and internal business condition, the company needs to map performance drivers in the HR scorecard. The following is theoretical model for strategic map. Strategic Map for Google Source: Author’s Creation 3.2 Step 6- Strategic HR measurement system In this stage the company needs to use traditional measures like annual performance of the employee, activity counts and cost per recruitment during initial phase. In the second step Google needs to establish HR as strategic asset complemented by employee appraisal system. In this phase the company needs to specify synchronization level required for financial and non-financial elements. Next step incorporate non- financial elements like Human Resource Management into strategic map (Armstrong, 2012, p. 696). For a simple value chain model like Google impact of non financial elements into the fulfillment of strategic objective of the company can be accurately measured. HR objectives like proper training & development, employee retention, employee reward system, recruitment needs to be measured in accordance to their overall impact on fulfillment of business objective for Google. For example low attrition rate of the company increases job security among employees while and also motivates them to give their best for the company. Attrition rate in Google is only 4%. Low attrition rate increases group dynamics among employees and also encourages system engineers and research & development team to create innovative design for search result optimization. The whole process will increase business efficiency for Google. The company should use two strategic objectives in order to fillip HR scorecard. Maximizing stakeholder’s value as well as shareholder’s value can be termed as long term objective for Google. The company needs to adjust performance drivers in accordance to demand of the situation. HR measurement system will help the company to set individual employee performance to fulfil strategic objective. The company needs to change focus from organizational HRM process to global HRM process in order to create better performance drivers for employees. The company needs to design HR measurement system in accordance to global practice. Google is moving towards new business line of digital marketing and for this process they need to follow performance drivers of industry leaders such as eBay and Amazon. The company requires to measure key deliverables such as customer engagement, quick service in order to fulfil objectives of HR scorecard. 3.3 Step- 7- Implementing the Strategy HR department of the company needs to review the scorecard regularly in order to sustain their importance on fulfilling organizational objective. HR department of Google needs to review the scorecard monthly basis and take corrective measure where it is needed. Suppose Google identifies system engineer’s productivity as core performance drivers. Now they need to review impact of ‘HR enablers’ on core performance drivers. Employee re-skilling can be classified as HR enablers for engineer’s productivity (Evans and Chun, 2012, p. 94). Organizational sustainability depends on efficiency of management team and role of human resource department. The organization is not a mere set of employees or top management. Organizational sustainability depends on synchronization between top level management, middle level management and lower level management. Business management helps to integrate functions of each department to increase the efficiency of service delivery. Business management plays a cordial role to solve critical organizational issues (wrong performance evaluation pattern, irregular remuneration scheme, employee disruption, maintaining transparency in human resource department’s work, communicating strategic objectives to existing employees). Google is one of the best employers in the world and surely maintains stringent control over above mentioned critical issues of management. Linking critical issues of management to performance drivers holds the key to success. Many of the critical organizational problems can be solved by using human resource pool properly. Using human resource pool in proper manner can be done by aligning performance drivers and HR enabler altogether. Many companies use Business Crisis Management (BCM) and Continuity Management (CM) to design performance drivers for employees. Employee re-skilling will help the human resource pool of the company to learn new technical applications and interpersonal skills in order to provide service in a better manner to customers. This strategy can be termed as HR-focused enablers while Google needs to use HR enablers to boost performance drivers of financial, operational and marketing departments. Suppose the company has planned to implement digital marketing to promote their new product google+ without altering outdated HR enablers to measure the performance. In this case the company need to implement performance enablers like web 2.0 training, social media marketing course for their employees to boost up performance drivers like better understanding of digital marketing and successful implementation of e-marketing. Google needs to link department wise objective to unified business objective. HR managers of the company needs to give importance on creating non HR enablers (performance driver such as timely new service mix development suggested by research & development department of the company) for non HR performance driver in order to fulfil business objective in a sustainable manner. HR managers need to design reward system for other departments in order to encourage them to contribute innovation in overall performance matrix of Google. References Armstrong, M., 2012. Armstrong's Handbook of Human Resource Management Practice. London: Kogan Page Publishers. Basu, R., 2004. Implementing Quality: A Practical Guide to Tools and Techniques: Enabling the Power of Operational Excellence. Stamford, Connecticut: Cengage Learning EMEA. Becker, B. E., Ulrich, D., and Huselid, M. A., 2001. The HR Scorecard: Linking People, Strategy, and Performance. Harvard: Harvard Business Press. Eckerson, W. W., 2010. Performance Dashboards: Measuring, Monitoring, and Managing Your Business. Hoboken, New Jersey: John Wiley & Sons. Evans, A., and Chun, E., 2012. Creating a Tipping Point: Strategic Human Resources in Higher Education. Hoboken, New Jersey: John Wiley & Sons. Kaplan, R. S., and Norton, D. P., 1996. The Balanced Scorecard: Translating Strategy into Action. Harvard: Harvard Business Press. Read More